Episode 18: Hanutosh Baria | The Real Finance Mentor Podcast
What a journey! From a small IT firm in Dubai to Investment Banking with a bulge bracket bank on Wall Street. And that’s just the career. Listen as we explore the CFA challenge, dealing with failure, Masters in Finance, the method and the power of focused networking, how to be work ready, what investment banking demands (and why it can be fun!) etc. with Hanutosh Baria.
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Binod Shankar:
This is Binod Shankar and you’re listening to the real finance mentor podcast from the realfinancementor.com. The real finance mentor is your go-to resource for insight and inspiration on careers in finance, CFA and more. Now you might think, why this podcast? Well, my goal is to deliver insight and inspiration for your financial career, by making it, one: relatable. I mean this is not theoretical stuff. We zero-in on the critical, practical issues. Number two: authentic. No bullshit, no side-stepping. The topics, guests and questions are all from that perspective. And number three: insightful. Take a Chartered accountant and a CFA charter holder, add 17-plus years as a corporate warrior, mix in 10-plus years of entrepreneurship, throw in a decade of full time CFA training. Add speaking, mentoring, cycling, mountaineering and other endurance activities, and that’s me! Welcome to The Real Finance Mentor, or as I call it: RFM.
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Binod:
Hello, everyone, this is Binod Shankar here with the next episode of The Real finance mentor podcast, the podcast that delivers insight and inspiration for your finance careers. As usual, I go far and wide to find just the right guest to be on the show. And today I have someone who was an ex-student of mine, and who is going to talk about his experiences in CFA, in masters in finance, and of course, very importantly, on Wall Street.
So, my guest today is Hanutosh Baria. Hanutosh basically did his Bachelor's in engineering in electronics and communications, from Birla Institute of technology. And then he did a Master's of Science in financial engineering from Claremont Graduate University in California. And he then finished off with the CFA charter, clearing all three levels of the CFA program in 2018.
And, of course, in terms of his career, and that's what we're going to focus on most of the time today. He, of course, post-graduation, as an engineer, spent some time in sales and business development; a brief while I would say. And then he did his master's, and he joined Barclays in New York, as a portfolio risk reporting analyst, looking at key credit risk metrics, looking at insights on portfolio counterparty moves, and looking at banking and trading book exposures. But then he made a big jump after that, which is interesting, because he went and joined Barclays Capital Incorporated, as the investment banking analyst in the global industrials group, where he looks after building models for leveraged buyouts, discounted cash flow models, for example, and includes interfacing with teams, including M&A, leveraged finance, debt and equity capital markets, credit risk, and Hanutosh has been involved quite a few transactions, including LBOs, debt financing, transactions, and of course, acquisitions. So, it's been an interesting journey for Hanutosh, which is why he's on the show.
Hanutosh, very glad to see where you are right now. It's been about three or four years since I last saw you in class, so, impressed and very interested in knowing how you got there. And pretty much that's the whole theme of today's interview.
Hanutosh Baria:
Thank you Binod, for this glorious introduction that you give. I am truly honoured. Definitely has been a while since we met face to face, I think it was back in 2016. I think that's when I saw you last. But it's great always, catching up. And I think, definitely, you are one of the key integral parts of my success. Between the you and Genesis and your training, I think I wouldn't be anywhere close to where I am. But yeah, thank you so much for having me on the show.
Binod:
Cool. Now, before we get to CFA, the charter and where you are now, I want to ask a very interesting question. How did you get motivated, as a freshly qualified electronics engineer, to enter finance, given that you knew next to nothing about finance?
Hanutosh:
Great question, Binod. I think let's take a step back and add some more colour to the story. So, per my recollection, the first time I ever heard about finance or remotely anything close to it was back in 2008/2009, when the great financial crisis was taking place. I think there was a lot of buzz going around as to what's happening. And I just got curious and decided to read up on it as to what's going on. And one thing led to the other. And I stumbled upon the word structured products, and that was pretty interesting to me. And you know, it really fascinated me and I just read it and I understood what's going on and that was pretty much the end of it at that point in time.
Moving onwards, I completed my undergrad in 2013, and got a job in an IT consulting firm back in Dubai. Great experience, I got to learn business development and sales. But I very quickly realized that this is not something that I want to do for the rest of my life. And that was really great of me to realize that. And so, I started talking to one of my friends. And you know, I told him that finance is something that I would consider doing and I find interesting, solely based on something that I read a few years ago. But wasn't sure if I wanted to, like, make a full-time commitment to it. Because I didn't know anything apart from what I read, right? So, he basically suggested, why don't I take his CFA books, and give it a read to see if I actually find it interesting. I mean, thank God, I didn't start with ethics. But I definitely read a few chapters from different subjects. And I decided, based on the initial read, this is something that I definitely liked, just from the thought of what I was reading. And I could definitely see myself doing this as a career. And so, this is something that I made a personal choice to make a switch right at this point, right? As an engineer, we solve problems, right? I decided to use those problem-solving skills, to solve the problems in the world of finance. So, let's put it that way.
Binod:
So, let so let me come to that point. Because this is what happened- because I've had a few engineering students in my CFA classes, and they have varying experiences. Now, you mentioned to me in an earlier conversation that your electronics engineering degree helped in your CFA journey. Now, this is very surprising, given the huge difference in domains, there's almost very little overlap in terms of topics.
So, tell me three ways in which your engineering background prepared you for the CFA journey. Because I'm sure there are quite a few engineers out there who are thinking about a career in finance and thinking about CFA.
Hanutosh:
Yeah, absolutely. So, I think that I mean, you heard that right when I said that engineering actually helped me a lot. So, engineering in general, is an interdisciplinary study where you're taught advanced concepts of mathematics, science, and a little bit of business management here and there, depending on which course you join. And essentially, all your knowledge is then used to design and conduct experiments, identify and solve problems, and make things easier. So, it's pretty much like a packed four-year, intense program, where you're challenged to learn different things and concepts, and then apply it in either forms of assignments, projects, to just test your knowledge. And you're consistently tested and challenged on these things and at every level, you know, increases, challenges increase, and the complexity increases.
So, let me give you an example. So, let's take mathematics as a subject. There are various equations, and most of it are actually derived from one thing or the other. It starts from one equation, and then you build on it right? And that just helps you think through different things and how to solve problems. And so basically, as I said, the equations are derived from one or the other. And there is always, there could be always one right answer. But there are multiple ways to get to the right answer. And that is something that you are taught during the course, it's not a one one-way street, you can probably find multiple ways to solve the answer.
And that's something that is taught in the course. And I think from my engineering program, something that I really learnt and it's transferable is basically logic and reason. That's one. You're actually taught how one thing relates to the other and how it could be used to look at how you can get to the answer using various different steps.
Two, basically, I would consider as technical skills, strong technical skills. And what I mean to say is that you're actually given formal training in mathematics and other scientific concepts, which you might not think are useful then but they're actually relevant to a wide variety of concepts.
And I can give you an example of that. One of it being stochastic processes, something that I really remember learning about. Stochastic basically means random, right? So, in one of my classes, in I think cellular telecommunication, (I still remember this) was that, when you transfer data, the way data is transferred is basically you have a header cell, and then there's data between and there's an ending cell. And when it's transmitted over a device, it basically mixes up so there's a stochastic process used to randomize the data so that no one can hack into it and then at the receiver end it's again used to lay out the data again. So, this concept is also used in finance, for solving for bond volatility or option pricing, and so on, so forth. So that's that.
And then the third thing that I learned was critical thinking, right? The ability to actually ask questions like, ask why, why is this happening? Why is this taking place? I think that's a very important thing that you learn, just to question everything. And that's very transferable, like, you know, to finance and other aspects in other fields as well.
I think the fourth thing that I learned was just the ability to work under pressure, like, if I remember correctly, like every semester, it was approximately four to five months, we had roughly six subjects each semester, and each subject had four exams plus lab, so a lot of pressure. Every month, you're pretty much studying giving exams, are trying to, move on, and the difficulty keeps increasing. So, like a lot of work, a lot of deadlines to meet, that's something that you learn to work under pressure. And so yeah, I think definitely all these above have definitely helped me in my CFA journey.
And you know, these are all transferable skills, which I feel, you know, having an engineering degree helps just lay a base in anything you do in life. And I mean, if you just, to be honest engineering is great, but other fields as well, play an important part because it just helps you understand or look at things in a different way. I mean, on Wall Street, I have seen folks come in from history majors, art majors, and you know, even from commerce backgrounds, finance backgrounds, and all of them are put into investment analysis. And that's just because of the way they look at different things. And that's something that's most important to understand.
Binod:
Yeah, I recall, you struggled a lot initially in my FRA class in level one, right? It was a vast and alien topic for you, I'm sure. I recall you coming to me, with a very anxious look on your face.
Hanutosh:
Yeah, absolutely.
Binod:
And I think you also failed level one CFA once.
Hanutosh:
Yes, I did.
Binod:
Now, this must have affected your motivation. So, my question is, what are the three thoughts that boil down the essence of what made you persevere through this alien, complex, vast domain; and ultimately come out successful?
Hanutosh:
Yeah, absolutely. I think, yeah, I definitely failed level one. That's something I actually cherish. And it was the first time in my life that I'd actually experienced failure. And you know, that’s something very difficult to deal with. Because you know, all these years, maybe like 20-21 years of your life you’re breezing through things. And you're like, “Okay, I know what I'm doing”. And then you're dealt a hard hand, and you don't know what to expect, right?
And especially, I got a band 10 in my level one, which was so close to passing. And I was like, “Oh, my God! How did I not pass”? So definitely, really demotivating when I got my results, because I wasn't expecting failure. I mean, no one expects failure as such. But to be honest, I am actually thankful for my failure, because it actually gave me a reality check. And it made me understand where I'm going wrong. So, at that time, in my head, I knew; how did I overcome this was basically I knew, failure wasn't an option. I tried something totally different, and I failed. And that is okay with me to fail, as long as you keep getting up, and, you know, trying on and moving on with it.
And then second thing was, this was something I really wanted to do. And if I just gave it up on my first try, I mean, there would be nothing out probably left as to where I was, and I would not be able to pursue my dream. So, I had to, like keep pushing through it. But these were some of my motivation factors, of course, like my parents, and my friends pushed me through it. And of course, you were like, a very good motivation to me at that point of time that it's okay to fail. And I mean, even like, in day-to-day life, I feel it's okay to fail, as long as you get up and keep trying on and move on with it.
Binod:
Absolutely. The CFA journey must still be vivid in your mind. I know, I qualified in 2005. And I still remember my level two and level three journeys vividly. Tell me the top challenge in each of level one, level two and level three that you faced, and one way how you cracked each level?
Hanutosh:
Yeah. So, I think you're right, every at every level of the exam, poses a different and a unique set of challenges. And as you progress with them, and you level up, it just gets tougher and tougher. So, let's start with level one, right? Level one for me was absolutely like a new curriculum. Every subject that I went through was absolutely new. Never studied anything, I think maybe except for some statistical concepts like Mean, Median, Average, which everyone knows about it. So, I guess I was pretty much brand new to this. So, for me level one was basically about building the base just in general. Learning from ground up what finance is, learning what are factoids, understanding what time value of money is, different concepts and, corporate finance and so on and so forth.
And the toughest subject for me was FRA, I think, out of everything. I had no idea what a balance sheet looks like and I think now that I think about it, how much of an impact it has made to me in my day-to-day life. I mean, at that point, I thought I would never want to do anything remotely close to FRA. And now in what I'm doing, it's pretty much like my daily bread and butter.
So, I will say, as I was initially struggling to understand what I was going through, and I was trying to just learn, memorize concepts, rather than actually making a conscious effort of understanding them. And once I realized that memorizing is not going to help me, I started taking a different approach to every subject, including FRA. Instead of hating the subject, I started showing interest towards it, kind of join the dots as to like what it's trying to show me and teach me. And then it just became easier to understand what was happening. And as I mentioned earlier, I had failed in level one. So, the second time around, I knew I was very close to passing and I just had to pay attention on what my weak subjects are, realize that where I made mistakes, and you know, made sure that I was strengthening those areas before moving on. There was no knowledge gap.
If something was trying to be taught to you, you understood that. And I was also less stressed out. Initially, I was more stressed out. When you're in stress, you sometimes don't end up thinking the right way. But this time, I was less stressed out, which made things much better for me. And, you know, I remember that we had a chat after I failed level one, and you gave me a game plan as to what to do next. And I pretty much stuck to the game plan to make sure there was no knowledge gaps. I understood what was being asked for in each LOS and I think what it was trying to teach me before moving on. And I think the most important thing was practicing. Like, yeah. Sure, you learn everything. But the best way to remember it, and actually apply it, is actually through practice; actually, solving multiple questions.
I think I made sure I solved across all levels. I made sure I’d solve all the end of chapter questions, the blue box examples, actually went back to understand if I missed out on something. So that was like level one. I think I gave my level one again in December, 2014? Yeah. And so, I got my results in Jan, end of Jan 2015. And I passed, I was pretty happy about that.
And I moved on from the base level now. Now it's level two, basically, this level kind of poses a different challenge altogether. It's a vast syllabus. Now we have learnt the basic fundamentals, the basic building blocks of each subject, what it is. Now Level two teaches you all about valuation. It's a vast subject. I think, if I remember correctly, the curriculum size is approximately one to two times larger than level one.
It's very vast and in depth, and it’s a tough process. And now the game has changed because now it's no longer like one sentence or two sentence questions with three answers. It's more like a case study, you actually read a big case study, understand, synthesize the information given to you in different parts, and then try to apply that together in solving the exam. So, this was back in February 2015. And the exam was June first week, 2015. So, roughly three to four months left. I knew, you know, I had no time to waste. And I wanted to make sure that I understood everything, what I was reading, and did not underestimate the exam because I knew what kind of a beast it was. So, when I was preparing for my exam, I completed my first reading by the end of April, made sure I practiced enough questions, you know, did all the blue box examples, end of chapter questions and gone through most of the questions and did it over and over again till I was comfortable.
Now for my level two, right, my game strategy was to nail down FRA and equity because at that time, those were the heavier weighted subjects in the exam, followed by you know, focusing on other subjects, which are in rank after those, like fixed income, corporate finance, ethics, quants. And that's how it went on. And I made sure to practice a lot of questions. Most importantly, time myself. It's very important when you have you have a big, big something to read, like you have a big case to read, and then answer the questions. It's not easy. And definitely making sure I answered each question approximately in three minutes before moving on. And so yeah, I basically finished my second reading of Schweser notes by first week of May. And now basically I had pretty much three weeks left for the exam. And all I was doing in that time was revising my formulas, getting up every day in the morning, writing it down. It took me like an hour and a half. I find time to write down each and every formula, so I remember and understand each and every formula as to when it's asked and then basically just going over the secret sauce, practicing multiple CFA mock exams, and just getting ready for the exam. I mean, at this point, you just have to focus, you just know what your strengths are and what your weaknesses are. There's no way you can learn anything new in the last one week. So, I was mostly focusing on what I knew to be my strengths and just you know, you just go and give the exam. There's no way you know that you're going to nail the exam or not, because level two and level three are totally humungous in your syllabus. And yeah, so that was it. I passed my level two back in, in my first attempt in 2016, June. And yeah, that was definitely a big victory for me.
Now, moving on to level three. So, level three, I gave it in June 2018. I think, almost two years post my level two, while I was working at Barclays. As I went to the US to do my master's, I didn't realize that it wasn't a good idea, to study CFA, and complete a Master's at the same time. So, level three was basically pushed back a little bit, but I definitely wanted to make sure that I cleared because this was the last hurdle now that you've cleared all two thirds of the way. It doesn’t make sense to do the last thing again, like last level, again. So, level three, was again, a different challenge, again. And in this case, in level one, like, you know, you learn the factoids, you learn various subjects and basic concepts. Now, in level two, when you build on those concepts, and you learn valuation, and how they combine and play together. And now level three, is when you start thinking like a portfolio manager, right? You basically use what you have learnt in your level one and level two, plus everything that was taught in level three, and put it together and think of how you're going to manage the whole portfolio. Now it's no longer like a particular subject, now everything is combined together and asked multiple questions. You can be asked questions on anything, right? And you should be able to answer that.
And to top it off, level three has a slightly different exam layout, where the morning-half of the session is a written exam, and the evening half is the multiple choice which is what you're familiar to from level two, which is also very important. And something that I realized in the exam is that you cannot write stories in the morning section of the paper. People want to see to-the-point concise answers, highlighting important facts. And if it's like a numerical, you make sure you write your formula down, you write the different steps, and you get the answer. So, in case you know, somewhere down the line, you missed up some decimal or something goes wrong in your arithmetic, that's fine. At least the examiner who's checking your paper knows where you stand, and you know the formula, he'll give you partial credit, if not full, hoping that. That's always a hope, right?
If you just write like 2.3 as an answer, if it's completely wrong, you lose out all the points. Basically, you don't get full credit for it. So, the biggest challenge for me was like to think like a portfolio manager and write concise answers, and that did not happen overnight, of course. Because, the last time I wrote was pretty much when I was in my master's program. And at work, you barely use a pen or pencil to write anything down. It's usually your keyboard, and how you think about it. So, what I did was basically, I started to practice to write answers in the exam format over time. I saw the solutions from what was provided in the CFA curriculum and tried to match that similar layout for answering the questions. And you know, over time, I got the hang out of it.
And my strategy for level three was basically to tackle the biggest subjects that were Private and Institutional Wealth Management, first, and followed by others based on the weighting. And I was using practice tools provided by CFA and Schweser. And I made sure I did not also lose sight of the multiple-choice questions, because you just had to be to be fast in that and you have to get those answers right.
And I also made sure that I was making very few to minimum mistakes on problems like numerical problems. And that's because there's only one answer. And you either get it right or wrong, there's no two ways. So, and that's a sure shot, if you get it right, if you know the formula, those points are yours. So, I wanted to make sure that I captured every point on that aspect, and also get good at what I was doing otherwise as well. So, in level three, for CFA, I had to become more consistent, and just understand the exam concept and just write the answer.
But something that's a common theme that I've seen across all three levels is that apart from it getting harder at each level, you as a person, have to be more consistent, diligent, and know how to be smart towards how you approach the exam. And you know, at least for me, I take out two to three hours a day, on a work day, after my work to sit down and study for the exam. On the weekends, like I think for all the exams, I used to put in like 7-8 hours every weekend to make sure I am catching up and understanding the syllabus and going through all the materials and absorbing it. Yes. So that was my journey.
Binod:
Yeah, that's quite a journey, of course, and thanks for narrating it in so much detail. I think it will be useful to anyone aspiring to write level one or two, or three. Now, while you were doing CFA, you thought one challenge is not enough, and, enrolled, while you were doing level three, for the Masters in financial engineering program from Claremont. So, I've got three questions for you and we'll go through each one, one after the other. So, my first question is why a Master's? That too an expensive U.S. one! Wasn't CFA enough?
Hanutosh:
So, I think, there are a couple of reasons for that. Considering my background in engineering, and only cleared CFA level two, not a lot of people or employers, I would say, considered me seriously as a candidate for pursuing any role in finance. Because I didn't have a full degree, I would say, in finance. So, that was one reason. So, I decided to pursue thinking now would be a good time, if I want to make a full career switch from engineering to finance. To actually get a formal degree or education, if you say, which will help me secure more knowledge, plus the certification required, or the check mark that, “okay, this guy has certified in this and we can actually consider him for other positions as well”. So back in 2015, you know, when I was in Dubai, I was looking for some roles, but I did not find any roles that were of interest, or in finance. I decided, maybe now's a good time to do my Masters first, and then come back and look at how things go. That was my first motivation.
Binod:
My second question here, is, what did you specifically learn the Masters that it wasn't in the CFA program? I'm sure there was not a complete overlap. There would have been an overlap to some extent.
Hanutosh:
Correct.
Binod:
But what is it that you learnt, that you would not have learnt in the CFA program?
Hanutosh:
So, I think my Master's in financial engineering program, in my opinion, was helpful. And that was because the program was basically split into two parts. So, first part was finance that you learned in your CFA, and then other part was mathematics. So, we first learnt the financial theory of what was taught in CFA; and then definitely, there was some other areas which kind of went deeper than the CFA curriculum.
And apart from that, there was a lot of project work. Like, forming your own Equity Analysis, portfolio management, training given to you just like you learn this in class. And then you have to do projects or assignments to actually apply what you learn. And that's something that'll help you get ready for your real-life job. You study equity and asset valuation.
Now, here’s a company, read through its financial statements, 10-K. What’s the industry doing? Write up an equity research and tell me why is it a good, bad, or any kind of investment- thesis. It's just to get started. And that's something that would kind of help you in your day-to-day life, in your real work life.
And apart from that, the other half of the course was basically learning the mathematical side of finance. Like, studying stochastic calculus, time series, probability, and other subjects, which actually taught you how that back-end formulas derive. CAPM is one formula. But you see it in the book as a one line statement. But it's not. No one came up with that one line statement, there's definitely a lot of math involved behind it. And that's something that we learned of- how to use mathematics to actually adjust an option pricing theorem for volatility, how do you calculate different bond prices using various equations and so on and so forth.
And also, you learn a lot of programming and other data science tools which are complimentary to my knowledge in finance. It, kind of evolved you into a broader skill set. So, my master's program also gave me access to my school's network and brand name. So, a lot of my alumnus who were graduated, were great resources to talk to. My school had connections with other firms which were actively employing. So, that was also a good resource when you're looking for a full-time opportunity. So, in my opinion. I guess it was useful for me. But for people who are already in the industry of finance and want to do this forever, I don't think there is a need for them to do masters. Yes CFA for sure will help you get wherever you want. But that would probably be it. The knowledge is great, but if you're already in industry, don't plan to switch out of it. I think this- your CFA, will just be fine.
Binod:
So basically, what you’re saying, Hanutosh, is if you want to break into finance, core finance, and you're not working in finance, then masters helps open doors that our CFA would not help open for you.
Hanutosh:
Correct. Like, you know, I think the way the world works, or at least what I've seen is that they at least look for, if you want to get into finance, an MBA is required or like a CFA or some formal education is required. And for me, that was the bridge that I wanted to complete. I should have bridged the gap that I had in my resume. And that was pretty much what I did. And also, in that process, gained a lot of knowledge and made a lot of friends and professional connections.
Binod:
Which, of course, brings me neatly to my next question. Something I’ve always wondered. How is the CFA program and the CFA charter regarded on Wall Street? I mean, specifically, where is it highly regarded and relevant and where is it less so?
Hanutosh:
So, I think, from what I've heard, and what I've seen, I think the CFA charter first is the gold standard in finance across the street. But it's specifically highly regarded in asset management, equity research, credit research, and you know, other various risk management roles. You actually see job descriptions mentioning that CFA designation or progress towards your CFA charter is highly preferred. And in your asset management, also what I've heard, clients feel more comfortable dealing with CFA charter holders. At least, giving the thought, that this guy knows what he's doing, if nothing more. So, I guess I would conclude by saying asset management, equity research, credit research, and various other risk management tools, where is where you'll see if a charter comes to play. And it's highly regarded. If you don't have one, they actually make you get one over time. That's something.
But I think the other places where it's not that relevant is investment banking, private equity, hedge funds, trading roles, those roles kind of don't mandate CFA designation. Although the knowledge you learn is very important and useful, but it's just like, you know, the charter is not mandated. You can still do in that industry without having the charter.
Binod:
Right. So, yeah, neatly segueing into investment banking, which you mentioned just now. So, your engineering degree was done, got your CFA charter, and finished your master's in financial engineering. And I want to talk about this move of yours into investing banking in a big firm in Wall Street. Now, although you didn't come from a target school i.e., the Harvards, or Stanfords or MITs, which is typically where the big investment banking firms hire from, if you got investment banking in a big firm in Wall Street.
Now, I know, you didn't get into investment banking directly post your master's in financial engineering. So, tell me exactly what you did, and how, to get to IB?
Hanutosh:
Correct. So, it's a long journey. Let me explain to you step by step. So, as an international student, my first priority was to secure a job. I was graduating in 2017, but I started networking a year prior to my graduation. I started adding people on LinkedIn, connecting with them, and reaching out to learn more about what they do, what their background is, and just to learn more about the job. And just to make a connection in general. I would actually never ask them for a job, like right out. I would actually go there and try to learn what they are doing, and what they do and ask them genuine questions regarding their background and their day-to-day duties, and form meaningful relationships. In the same time, I was trying to understand, “is this something that I wanted to do”?, Or from what I heard is this something I like, . Right, that's the starting point.
And then I also attended a lot of networking sessions hosted by CFA and my grad school. So, that kind of helped me make more connections. And, you know, you meet various working people. I'd exchange my cards with their cards, make sure I follow up with them into an email saying that, “hey, I met you yesterday, it was great meeting you and I'd love to catch up sometime soon again”. And just keep maintaining a connection, it's very essential. Over time, getting your name out there in the market and getting recognized over time is, was my starting step. I always used to follow up with whoever I reached out, after a few weeks or months. It could be related to anything and the follow up doesn't mean that I'm again, pestering them. I would basically go and I would see an interesting article that was relevant to their field and I would ask them questions, or it could be as simple as Happy Thanksgiving, Merry Christmas, have a great year, we should probably connect in the upcoming year. And that basically just kept me in front of their eyes and in their minds so that anything comes up, they will probably think about me. And that's what I was doing. And you know, at the end of it, it's always a numbers game. The more people you reach out to and connect, the higher the chances are of getting closer to an interview and landing a job.
So, similar thing I did to secure my first role at Barclays as well.
Back in 2016. In February, I was visiting New York, and I happened to ask one of my professors, do we have any distinguished alumni who I can meet over the next one week, or who he could introduce me to, when I was making my trip to New York. He mentioned that one of our professors at that time, who used to teach at Claremont was also the Chief Risk Officer of Americas at Barclays. And I was like, Yes, absolutely, I have to meet him. And he connected me. And he fortunately agreed to meet me. And we went to New York and met him. And that was my start of my friendship with him. And that was the beginning, and over time when he came to Claremont, I used to always go say hi to him. At least just have a conversation with him, to make sure that I was attending his classes, made sure I did good. And you know, we kind of bonded apart from the classes and the formal setting, just as friends, over time. And then now fast forwarding a year ahead to February 2017, I was actually looking for a job. Now I was coming closer to graduation, my thing was to land a job before I graduate so I don't have the headache after that. So, I was focusing really hard on that.
And I was talking to one of my seniors at that time, he had graduated, and he was actually working at Barclays. So, I reached out, and he said, “hey, there's this role coming up in my team, you know. You might actually like it”. And he told me about the role. So, I actually enjoyed it, from what I heard. I reached out to my professor, saying that, “hey, this I heard from my fellow colleague/my friend, that there’s this role in Barclays; and would it be possible for you just to make an introduction with me apart from him, to someone else within the firm. And he actually made the connection, and it was one of the heads of the department where the role was opening up. And the person and I actually had a conversation for an hour and a half; and we actually enjoyed speaking with each other and that basically led on to other things. I met with other four or five folks, and had such conversations and one thing led to the other. Those were my four or five interviews that I had and landed a role in my portfolio credit risk team.
That was my first role at Barclays.
Now, basically, I had been at the organization for a year or so, and after completing my CFA level three in June, 2018, I decided I wanted to move into a front office role, where I could actually use the knowledge that I'd gained through a formal training and decided to pursue a career in investment banking.
So, as I was already an employee of Barclays, it was kind of slightly easier because I knew which people worked where and what departments they were part of. So, I actually started networking. I repeated the same process; basically, I started networking with senior managing directors within the firm, in areas where I wanted to be a part of, or what I thought was interesting. And I sent out just cold emails, asking them for informational chat, and want to learn more about their work and background. And I think if I had to guess, I must have easily messaged more than 100 MDs plus; easy, easy, across various teams that I was passionate about joining. And, you know, my hit rate was 50%. Some people would reply back, some people were busy, that's fine. I understand. I totally understand that, and it’s always follow-up.
And through my networking again, one thing led to the other and someone reached out saying that, “hey, there's this role opening up in my team, would you be interested”?. And I said, “Yes, absolutely”! And I interviewed. I think six interviews later, I landed my job in investment banking.
Binod:
That's quite an interesting. I mean, as I mentioned to you in our earlier talks as well; I think quite a few things that youngsters can learn from. Now, talking about youngsters, the biggest fears that youngsters have, is that of approaching senior professionals and asking for help, because they might either get a rude response, or worse, probably, no response at all. Yet, you did that repeatedly in your journey, all the way from masters to investment banking. So, explain to me, what was your mindset here?
Hanutosh:
So, I think my mindset was very simple. I had a vision in mind, and I wanted to get there. And I knew my final outcome, and networking was a great way to learn about new people, new areas within the bank, or new areas within the industry itself, form professional relationships and in turn, it could end up someday getting someone to like you, and (you) going for an interview. So, every time that I was looking for a job, either in risk or investment banking, I formed meaningful relationships with someone in that field, understanding what they do, then analyse- is this is something that I want to do for the next few years of my life? And then pursuing it after.
So, when I wanted to make a switch in investment banking, I was very clear of what I wanted to do. That was number one. I then came up with an elevator pitch. A two-minute story on what my story is, what my background is and what my experiences are, and how they have led me to where I am and how my experiences will help me go further, and I could be the right candidate for this role. So, I'd explain my story very well and add my reasons to why I want to do this and why I would be considered a good candidate for this. That was very important.
You essentially have to sell yourself at the end of it. Anything and everything you do in life, in one way or the other is sales. You want a job? What are you doing? You're actually pitching yourself and your skills to an employer. That's in a way, sales. So, as I embarked on this journey, I think something that I found interesting was, that, one- I found out I made sure which teams within investment banking were of interest to me. That's one. And two, who were the senior folks in the team and who I should connect with. Those were the two key strategies that I implemented. And my thought process was slightly different, you know, and non conventional.
Usually, when people approach, they decided to talk with the junior people first and in the team, and then work their way up. I decided to do the other way around. I thought, if I actually wanted to live in someone's house, it didn't make sense to ask, the person who was renting the house rather than ask the owner, who owns the house, “can I live in your house”? So, I pretty much used the same analogy and decided to reach out to the gatekeepers of the team, or the heads of the team. So, I only reached out to the senior managing directors or heads of the teams. I was very careful in my approach as well, they are very busy people, and I don't want to waste their time. And if I got a chance to speak with them, I don't want to mess it up. So, when I met them in person, I made sure I had my story patted down, completely knew it. I knew my reasons why I want to do this, why I would be a good candidate, and actually come up with interesting questions to ask them. Something like- if they're working on a really good deal, I would love to know what is the most challenging part of the transaction? Or what went through or what was going through their minds? And asking questions which were not found online. Or basically just saying, not asking generic questions.
So, that was basically how I got to learn more about that. And in my head, essentially, I think this is.. Let me relate networking to something that we learnt in CFA.
Networking is like a free call option where there is no premium that you have to pay for it. And there is only potential unlimited upside to this. So, let me explain it a little further. So, you reach out to network, right? The best thing that could happen is that you meet the person, the person really likes you, you potentially get called for an interview, and ultimately, if you crack all the rounds, you get hired for the job, right? That is unlimited upside in my case The worst thing that could actually happen is you won't get any response from them. And you know, you still stay at the same place where you are. Essentially, in my head, this would probably be the most profitable trade that anyone could actually get into and it's free of cost. You just have to reach out and ask. And, of course, initially I was concerned of reaching out to the seniors, but the sooner I realized that they're human beings, and I had nothing to lose, the more I implemented my strategy, the only thing that I had to do was basically to prepare on why I want to do this and wanted to be excited to learn from what they have to say. So yeah, that was how I did it.
Binod:
Fascinating. You know, Hanutosh, it seems that given your narration of your journey, that knowing the right people played as big a part as having the right credentials.
Hanutosh:
Absolutely.
Binod:
Now going forward, a tight job market, lots of supply, limited demand from employers’ side, absolutely it is essential that youngsters quickly understand the basics of networking. So, given your experience, can you list your top five networking tips for youngsters who are ambitious and smart, but bit naive about how to proceed?
Hanutosh:
Sure, absolutely
i) Before you start networking, you should only pick one or two jobs; maximum of two jobs that you want to pursue. And not more than that, because when you narrow down the scope, it makes it much easier for you to network and easier to prepare. If you're choosing like five different fields, you have to learn five different subjects and you know, that's not the best way to use your time and resources. Narrow down on the jobs that you really like and have it ranked number one and two…, but that's how you start.
ii) You should never be afraid to reach out to people and connect however senior or junior they are, this is the only way you will actually get yourself out there and be marketable and presentable in front of people. They will not know who you are until you actually reach out to them.
iii) Know your audience. If you're speaking to someone who's working in, let's say, risk management, and if you ask them about a job in asset management, that would be a waste of their time and your time as he basically would feel that you have not done your homework to understand where he works and two is that he actually might be limited in that capacity to help you out because he's in a different field and you're asking help from him to go in a completely different field. So that's a very limiting. Next is never ask for a job, rather be genuine in connecting with the person to learn more about the field he is in, what he is doing and forming a meaningful relationship. Yes, you know, down the line, if things work out and you have shown interest, and made a strong impression, they'll definitely keep you in mind. And that's how you pop up. And basically, if you form a really good relationship, I would remember, “Oh, yeah, this person reached out to me, I think he might actually be good for a role and let me ring him up and see if he's still interested or available for this position”.
iv) Networking is not like a one-time exercise where you just reach out to people, connect with them once and expect miracles to happen or take place. Networking is more like a long-term investment, that you actually have to invest in this process. It's a very long-term process, where you keep in touch with people. It just could be anything. Just being in front of them. And over time, it'll actually feed benefits.
v) When you're speaking to someone senior, make sure you have your story patted down as to why you want to do this, what makes you a good candidate and always have something; some interesting questions, and not some generic questions that you can find answers to online. Because the first question they'll ask you is, “Okay, why do you want to do this”? And if you fumble, or don't have a right answer, I would just be like, “Okay, this is just someone regular, who was just looking for any job. And he's really not interested in this one. And he's just reaching out to me”. And I think so that's something that's very important- know your story and why you want to do this. And also, you're trying to learn as much as possible about the field, when you go out there and network. So, the best way to do it is basically asking questions, which also shows curiosity to the person who you're talking to. And that kind of makes them think, “Okay, this guy is actually interested in this”.
Binod:
Right. Now, you've been in investment banking, Hanutosh, for nearly one and a half years, and have been involved, if I mean looking at your resume, in quite a few big deals; including leveraged buyouts, acquisitions, debt financing. So, I've got a few questions for you. Firstly, because a lot of youngsters see investment as a very sexy field, you know, investment banking and obviously they want to break into IB, but they have no clue of the skill sets IB demand. So, what are the skills, aptitude, you must have to succeed?
Hanutosh:
Okay, so I think the most important skill, is technical skills. Like accounting, valuation, those are very important. That's your daily bread and butter. And that's the bare minimum requirement, that's not even a requirement for you to reflect. It’s like a tick mark, “okay, he has it”. Every other candidate who's interviewing will know his technical skills. So that's the first place to start with.
But that's not the only thing. Second thing, what is like an aptitude wise, I would say taking initiative. If something comes along, you should be the first person to raise your hand, say that you would do it. But you should kind of always be careful when you say yes. Because if you try pleasing everyone, or saying yes to everything, you're essentially setting yourself up to failure, as there are only 24 hours in a day. And those deadlines are rarely shipped.
Third thing I would suggest is attention to detail, because sometimes the devil is in the details. You might not pay attention to it, but at the end, that would actually make it a win or lose situation for you.
Fourth thing I would say, would be problem solving and critical thinking. Something that's very important. Quite a few times you'll be given work and you'd be expecting that you would be taking on this work from someone else and helping them out, relieving them of this duty and helping them think of bigger picture stuff. So, in this case, of course, they'll guide you and help you, but most times people are busy in other things, and you might not get constant attention. So, for you to actually solve the problem given to you or think critically, that's very important. And that kind of shows, that if you can do that, “okay, you're giving him some responsibility, he's able to do that. Let's move forward and give him higher responsibility”. I think that's what they say in banking, “before we help you merge two companies, complete this simple task before you actually end up doing something very heavy”. So, gaining the trust of a person is very important.
Binod Shankar:
Right. So, that is the top-three aptitude or skills that you need.
Hanutosh:
Correct.
Binod:
What are the top three attitudes, in terms of your approach to work, that you must have in IB, to succeed?
Hanutosh:
So, I think something that's very important is your soft skills. Your personality, how you speak, how you connect with people, how you present your work, is very important. At the end of it, any job that you do, requires some sort of personal connection. If you're an easy person to work with, that's much better for you and everyone, compared to not being an easy person to work with.
Two would be- you should always ask questions. Show that you're eager to learn. If you don't understand anything, sure, take out the first 10-15 minutes to understand it, or do it by yourself; but if you don't, always ask question as to why is this happening? Can anyone show me how it's done? Or anything that you don't understand. It just shows that you're eager to learn.
And, you know, third thing I would say is like, when you actually join, you may not know anything or everything at all. And that is okay, as long as you're willing to put the effort and learn. That's something that's most important.
Then, the fourth thing I would say is humility and being humble. Like showing excitement in your job. Not being arrogant, being responsive to people when they email you, right away. At least, telling them, “hey, look, I got this, I saw your email. I'll get back to this later on the day”, or whenever you get time. But at least, that way people know you read their email, and they are not consistently worried that have you got my email or not. So, yeah. So, essentially, as a beginner, you don't bring a lot to the table. But you're expected to bring excitement and eagerness to learn. And I think if you have these qualities, I think you are definitely set up for success.
And I think the last but not least, is having a great work ethic. Always showing up on time, meeting deadlines, always extending a helping hand to the team. I think that goes a long way. So yeah.
Binod Shankar:
So, what are the three things you like the most about your job as an investment banking analyst?
Hanutosh:
I think something that I really like about my job or truly love about my job is the kind of work we do. At the end, me and my team are actually providing strategic advice to clients (and those are big corporations) on mergers, acquisitions, debt and equity raising, divestitures, and so on and so forth. That's something that's really interesting to me.
Second thing, which is, you actually get to meet and get to be on calls with CEOs, CFOs, and other senior executive members in various companies, and you get to learn a lot from the way they are thinking about things; this is something that you don't get to see in a normal job. It’s a very rare opportunity, I would say, given you're being able to sit with them, and understand their way of thinking and being able to learn from them as well.
The third thing is you work in a very fast paced environment. You work with intelligent people, you work across various sectors within the industry, you learn about a lot of companies, you build knowledge, on different products, different industries, segments, and how they operate in the bigger picture scheme; and also, as a bank- where you sit in the big picture and how you facilitate and help your clients out for the greater good. So that's something that's really interesting, that I actually like about my job.
Binod:
Let's talk about work readiness or what they call employability, which is an area I'm very keen on. Now, you said in a previous chat that we had a few weeks ago, “we agree that there is a gap between theoretical knowledge and practical knowledge, and one should learn to close the gap”. Now, in your case, what were the gaps you discovered after entering banking and how did you close this?
Hanutosh:
Okay, so, great question! I think CFA or any professional qualification gives you the theoretical knowledge and understanding of how things are done. And that's only one side of the coin. The other side of the coin is to actually take that and put it in practice or actually implementing it. Stage one is to learn, understand the theory. Stage two now, is to actually put it in practice.
So, let me give you an example. The CFA curriculum by itself teaches you accounting valuation techniques, trading multiples, DCF, to some extent, talks about an LBO and so on and so forth. But in the CFA curriculum or questions, all the data points required by you are already given to you. Like sales is given, growth rate is given. Like, sometimes, you got to calculate your return on equity, but most of times, it's given to you or it's easy to calculate. It's a one step process to count, answer and then solve. And so, essentially, everything is given to you in a platter to solve and get the answer. That's great.
But now, when you transfer to a daily work situation, when you're doing the same DCF analysis, you're going to start by collecting data from your 10K or 10Q or investor presentations that are available online. Then you actually end up making a full-blown financial model, and then perform the valuation analysis. And that's a much longer process than what was taught in our CFA, that result is the same. But it's a longer process to actually use Excel, to actually implement it. Those are kind of the gaps that I identified. And those are additional steps you need to take to transform your theoretical knowledge into practical knowledge.
So, in my experience, basically, I also had a similar experience where I studied all of this in theory, but actually never applied this in practice. So, there was a steep learning curve. And it is a fast-paced environment, you are given things, you've got to learn things really quick and being able to deliver because dead-lines cannot get pushed back. So initially, I would spend actually a lot of time for just refreshing my theoretical knowledge. But then also spending all my weekends, just building financial models, and just using different accounting concepts, valuation concepts, and putting it in practice. I'd just literally take on any company's 10K, build out a three-statement model, forecast it ahead, use various valuation techniques to value your company and just keep practicing that over and over. That essentially becomes second nature. And that's how basically, you bridge your gap from having a theoretical knowledge to now bringing it in practice.
Binod:
Now, I asked in our earlier talk whether you had any regrets on education, career, and you said, “No, no, I don't”. Usually, almost everyone has at least one regret. I know, I have several. Even the mighty Jeff Bezos of Amazon says, “you can minimize regret, and you can't eliminate regret”. So, tell me briefly how you achieved “Regret-Nirvana”?
Hanutosh:
I think it's a great philosophical question. But from my standpoint, the way I look at it is slightly different. I personally feel that all the experiences, good or bad, from my undergrad, to where I am today, have a common theme. And that basically is, that from every stage, I have learned something, and that was useful to apply to the next stage. And I'm actually grateful for that. If I did something, and I did not like it, I found out the reason as to why I don't like it. And now I know, “okay, this is something that I don't want to do in the future”. And I make corrections or amendments to it. It's kind of a learning process, you know. And if I like something, then I even made sure, “okay, I like it. Now, let me put in more effort to make myself better at it”. So, I always believed, in trying everything out, and it's okay. It doesn't matter, you fail- that's totally fine. You get up, you learn from it, you're free.
“I think the best teachers are actually your failure”. Whoever said that, was absolutely right. And that's how you do it. I mean, you failed. You like something, you don't like something, you basically try everything out. That way, you know what you're good at, or you're not good at, and you don't have the fear of missing out on anything. So, I guess, at least in my viewpoint, I would actually say that I have no regrets. And I believe that all of my experiences together have actually helped me get to where I am today. And I'm hopeful that it would probably play out the same way in the future. Yeah.
Binod:
Fantastic! You know, thanks so much Hanutosh. All good things come to an end. And so, does this very interesting podcast. And personally, and I've told you before, I'm quite amazed and delighted at the same time, that I've seen you from working in a small IT consulting firm in Dubai, and now you're in the big league in investment banking on Wall Street. So, kudos to you, I think. Of course, all the credit goes to your attitude, and aptitude and in terms of, you know, learning and networking and the mindset. The mindset of not giving up, despite failure in level one, for example, or not getting into IB in the first shot, or many MDs not replying to your approaches towards them. This is part and parcel of life, I think you need to have a growth mindset, you need to be mentally tough. And I think these are all great lessons for youngsters around the world who want to break into finance. And I hope they learn. And I hope this podcast has been not just inspirational, but also very insightful on how they should go about doing things. And I'm hopeful that like you said, “I hope it will play out the same way for you in the future as well”. And I think it's all about mindset, attitude. And once you've got that in place, and once you work your way, then success is almost inevitable, is what I'd like to say. So, thank you so much, again, wonderful reconnecting with you after a while.
Hanutosh:
Thank you so much Binod for having me. I think it was definitely a pleasure. I think, as I said earlier, definitely, part of my success also belongs to you. If I had not met you or had you not guided me out, I probably wouldn't be where I am today; or (it) wouldn’t be as of an easier transition, and be much more of a difficult transition to where I am.
Binod Shankar:
That's very generous of you. But I'll accept that. I won’t complain. Thank you so much, Hanutosh, and I wish you very best in your career.
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Binod:
This podcast is brought to you by the real finance mentor. Thank you so much for listening and I really hope you found it insightful and inspirational. If you did enjoy this episode, please drop us a review and spread the word. You should check out more exclusive content on therealfinancementor.com and my LinkedIn profile which is: Binod Shankar, FCA, CFA. Let’s keep in touch! Just add your name to the mailing list on therealfinancementor.com, and we’ll tell you about new episodes plus book reviews, upcoming events and blogs. Till the next time, onwards and upwards.
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